Arizona Real Estate License Practice Exam 2026 - Free Real Estate Practice Questions and Study Guide

To find the estimated value based on the given information, you first need to calculate the effective gross income (EGI) and the net operating income (NOI).

Start with the monthly income of $6,200. The annual income would be calculated by multiplying the monthly income by 12, which equals $74,400. Given the vacancy rate of 10%, the effective gross income would be determined by reducing the annual income by the vacancy amount:

10% of $74,400 is $7,440, so the effective gross income is $74,400 - $7,440 = $66,960.

Next, you need to subtract the operating expenses from the effective gross income to find the net operating income (NOI). The annual expenses, calculated from the monthly expenses of $1,500, would be $1,500 multiplied by 12, which equals $18,000.

Now, subtract this from the effective gross income:

$66,960 (EGI) - $18,000 (expenses) = $48,960 (NOI).

To find the estimated property value based on the expected return of 8%, use the capitalization rate formula:

Property Value = NOI / Capitalization